Insider's Guide To Referral Marketing

If you want to use word of mouth and develop a referral marketing strategy, you’re on the right track. Many studies suggest it’s one of the best forms of marketing available, and least expensive.

Reviews and testimonials provide ‘social proof’ that a company is someone reputable, and since people trust the opinions of friends and family, referral marketing can be a win for your business.

Part of the reasoning behind why it’s so powerful is that it provides a form of targeting. Since most people have a personal network, any referrals you can acquire from a customer is often seen by others within their network, and they are often nearby within a radius.

Referrals also carry trust, and if a friend mentioned it, that’s often good enough for others if they’re in the market for particular goods or services. Even if they aren’t at that time, the exposure can help develop awareness for a more suitable time.

Who is Referral Marketing For?

It doesn’t matter if you’re a doctor, realtor, restaurant, salon or car dealer, referral marketing is for every type of business. From the small single-owner or entrepreneur to corporations in just about any industry,

Up to 65% of new business comes from referrals

Types of Referral Marketing

We can distill it down to two, reputation and experience. A referral that is based on experience is a customer that has previously worked with your company and shared by word of mouth to friends, family or a colleague. While by reputation is a result of exposure to your brand, be it from advertising, or even engaging with your content.

In a study by Nielsen, referrals were the leading form of advertising in terms of trust, and far ahead of the other options;

Source: Nielsen

Also note that lines 3 and 4 (Consumer opinion & Editorial content) are also forms of referrals.

Here’s what you need to know to make referral marketing work for your business.

Above and Beyond

If you want to get it, you have to earn it. Exceptional customer service is the cornerstone to earning 5-star reviews, glowing testimonials, and creating referral marketing strategy that works.

Creating the Wow Factor

Beyond customer experience, there are a number of ‘touchpoints’ and small details you can examine and explore to making your product or service stand out. Often, it’s in the details. If it’s shareable, customers often feel compelled to do so.

Be Consistent

This isn’t a set and forget approach, don’t assume it will run itself. Once your campaign or program is up, you want to keep working at it, and treat as a process that you continue to work on habitually to make it effective.

Be Sure to Ask

A big part of a successful campaign or program to get referrals or reviews is to simply ask. Failing to do so means you’ll miss out on word of mouth opportunities. If you’re confident that you’re delivering an exceptional product or service, and even hear it from time to time, all it often takes is to simply ask a customer if they’ll share their opinion. If they’re truly delighted, most will.

Another way to leverage a referral is using a customer success story in your marketing. By including them, a customer is more likely to help distribute your marketing, and introduce your company to their friends and family.

Be Sure They Know

Making your customers aware of any referral marketing activities or programs tends to increase effectiveness. Whether that’s having a sign by a cash register, on an invoice, or in your email signature is up to you. Why choose? Do them all. Using your social media profiles is also wise. Some of the most effective referral marketing programs tend to be embedded in most aspects of the user experience. For referrals to deliver, include your program as part of how you operate.

If you focus on the product or experience, your referrals should follow. Under promise and over deliver is always a way to go.